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Here’s a letter to someone who “can no longer keep silent in the face of” my [Boudreaux’s] “ivory tower theories about trade”:
Mr. Walney:
Thanks for your e-mail.
You say that it “is only common sense” that “protecting American workers from the need to compete against low wage foreign workers makes America richer.”
I disagree.
First, another name for low-wage foreign workers is “low-productivity foreign workers.” Foreigners whose wages are lower than are Americans’ wages are foreigners who, for whatever reasons, are less productive than are American workers. If you replace, in your e-mail, “low wage” with “low productivity,” you’ll immediately see the error of your claim.
Second, if it’s “common sense” that Americans are enriched by protectionism, is it also common sense that Americans are enriched by vandalism? Seems so.
Suppose that the current level of protectionism annually reduces by five percent the value of goods that Americans buy from foreigners. Further suppose that the U.S. government abolishes its current tariffs and other trade restrictions and replaces these with a horde of vandals that it hires to annually destroy five percent of the goods and inputs that American households and firms acquire from abroad. Does your common sense tell you that this vandalism will make America richer?
Of course not. Yet there is absolutely no economic (or ethical) difference separating such vandalism from tariffs and other trade restrictions. And so if you support protectionism, you support vandalism. Period.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030